- Toncoin made significant gains over the last 36 hours, accompanied by high demand
- Liquidation heatmap showed that bulls should be wary of going long
Toncoin [TON] climbed by 13.7% in the last 24 hours after former VISA executive Nikola Plecas’s appointment as the Vice President of the TON Foundation. This rally saw the altcoin challenge the $3.35-$3.5 resistance zone for the third time in five weeks.
The repeated retest of this resistance zone indicated that a range formation might be in place. If that is the case, TON traders and short-term holders should sell the token at a profit.
Toncoin range formation could be bad news for bulls
Source: TON/USDT on TradingView
The token has traded within a range (purple) for almost a month. This range reached from $2.95 to $3.5, with the mid-range level at $3.23. The latest rally went from the range low to the high in 36 hours.
Measured at its local peak of $3.7, TON posted whopping gains of 26.5% in under two days. At a time when Bitcoin [BTC] was struggling to climb back above $110k, and the altcoin market was trending sideways, Toncoin making such gains was impressive.
And yet, there was a cautionary ring to it. The move was halted abruptly just above the range high. At press time, the price was not even above the $3.48 resistance level. The OBV saw a move higher as the past few sessions saw high trading volume. The Awesome Oscillator seemed to be making a bullish crossover too.
Source: Coinglass
However, the liquidation heatmap highlighted the threat to bulls too. FOMO could be an enemy to Toncoin traders now. Since 10 May, a cluster of liquidity has been building up around the $3.6-$3.66 area.
There appeared to be another magnetic zone at the local high at $3.2, formed over the past week. Both liquidity clusters were swept during the recent move. Generally, such swift moves hunt liquidation levels and tend to reverse after claiming them.
If TON cannot flip the $3.5 region to support soon, traders should prepare for a trend reversal.
Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion
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